Format developments in Poland's grocery retail market

Date : 31 August 2017

Auchan launches convenience format, Carrefour introduces innovation in its online platform, and more about other grocery retailers in Poland. We report on the latest news from the various international and national retailers in Poland give you our take on their respective subjects.

Auchan launches convenience format in Warsaw

Auchan launched the first MyAuchan store in Poland, as part of Auchan’s global strategy for 2017 to expand its convenience format. MyAuchan stores are based on the proximity store model, with a sales area size between 200 and 600 square meters, and an SKU range of 7,000. The stores will stock a rationalised range concentrating more on own-brands and a EDLP strategy. Also, each store’s range will be adjusted to the needs of the local catchment area. This follows the enhancement of the online service in Warsaw in the summer of 2017 that gives the option for delivery or Click & collect, as well as same day delivery options.

Carrefour shopper-to-shopper delivery service

Carrefour Poland launched a shopper-to-shopper grocery delivery service under the service name “SaSiatki". Online orders are collated and delivered by other Carrefour shoppers and are rewarded with discounts coupons via the loyalty programme. The service is available in some Warsaw hypermarkets, but covers the entire capital. Soon the service will be available across all of Warsaw’s hypermarkets and some supermarkets.

Carrefour Poland to grow own and franchise network

In 2017 Carrefour Poland will exceed 900 stores in the country and exceed 1,000 units in 2018 more than doubling its store numbers since 2012. The retailer averaged over 85 store openings over the 2010-2016 period, and is expected to open a mix of 100 own and franchised stores in 2017. However, the retailer indicated that the limited profitability in its franchise stores and inadequate locations is causing a loss of franchise partners.

Improved H1 2017 result for Eurocash because of M&A activity

Eurocash reported an 11.6% year-on-year growth in sales for the first half of 2017 when compared to the previous year’s 3.2% increase. The improved performance is almost completely attributed to a mix of organic growth, completed acquisition of EKO in January 2017, and its new format projects such as ‘Big Ben’ and ‘1 minute’. The wholesale and retail operator also reported a marginal slowdown in profitability to reach 1.4%, driven by wholesale business. However, the retail segment registered most improved profitability.

Eurocash looks to acquire Mila

In H1 2017 Eurocash signed a letter of intent with Mila SA to buy its network of 188 stores – to its 10,000 plus network - and add around PLN 1.5bn (EUR 343mn) of sales. This acquisition will boost Eurocash by two positions in the grocery retail sales ranks, overtaking Carrefour and places it in touching distance of Tesco Poland. The Mila SA acquisition will raise Eurocash’s density of coverage in the central Poland regions, and build on its presence in the south alongside its two banners Eko and Delikatesy Centrum. Eurocash’s intends to integrate Mila stores into its integrated wholesale system under the Delikatesy Centrum banner in a mix of franchise and own stores.

Zabka’s Freshmarket rebrand

Zabka rebranded at least 12 of its Freshmarket stores into a new format under the ‘Galaxy’ banner as part of a pilot programme. The ‘Galaxy’ format was launched in the summer of 2016 and the formats SKU range fits the needs of the top-up and impulse buy shopper missions. The assortment will be expanded compared to Freshmarket’s to focus on ready meals, snacks, beverages, and especially food-to-go. If successful Zabka indicated it might convert all the Freshmarket banners to ‘Galaxy’.

 

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Amin Alkhatib, Retail Analyst CEE, IGD International: based in London, UK, Amin is responsible for shaping IGD's research in Central and Eastern Europe; as well as contributing to IGD's broader European research programme. Follow me on Twitter @Amin_IGD for further insight on the region’s retail landscape.